Union Bank of Nigeria announces 15% drop in gross earnings
Union Bank of Nigeria Plc has announced its unaudited financial statements for the first quarter (Q1) ended March 31, 2021 with Gross earnings dropping by 15per cent to N36.4billion from N42.6billion in Q1 2020.
The decline in gross earnings, according to the bank was driven by lower interest environment in the Nigeria financial sector.
The group reported Net operating income after impairments at N24.3billion in Q1 2021 from N24.2billion in Q1 2020.
Meanwhile, Union Bank of Nigeria on the Nigerian Exchange Limited (NGX) on Thursday reported profit before tax of N6.9billion in Q1 2021, up 12per cent to N6.2billion in Q1 2020, driven by higher non-interest income and lower operating expenses.
Non-interest income: up 10per cent to N14.1billion from N12.9billion in Q1 2020, driven by successful debt recovery efforts. Operating expenses: down four per cent to N17.3billion (N18billion in Q1 2020); an outcome of sustained cost optimisation efforts.
The group reported gross loans that gained three per cent to N757.4billion as at march 31, 2021 from N736.7 billion in 2020, while Customer deposits remains flat at N1.1trillion as at March 31, 2021 from N 1.1 trillion in 2020.
In addition, the group reported Non-performing loans ratio at is flat at four per cent.
Commenting on the results, CEO of Union Bank of Nigeria, Emeka Okonkwo, in statement said, “I’m pleased to be able to provide the first set of quarterly results under my tenure as CEO following a smooth transition in leadership. Despite the challenging economic climate, our Bank has maintained a steady performance that we can build on for the rest of the year.
The Bank has responded well to the challenges in the market since the onset of the pandemic. Our overall efforts in Q1 delivered a 12per cent growth in PBT.
“We are particularly pleased with the consistent growth we are seeing in transaction volumes which validates our digital-led strategy and is delivering returns. By prioritizing personalized solutions and enabling self-service, we are attracting transaction-backed deposits and enhancing customer knowledge to better manage risk.
“Our performance was also supported by strong debt recovery efforts which contributed to growth in non-interest income, enabling us to maintain net operating income at N24.3bn despite the significant reductions on net interest margins across the industry since Q1 2020.
“Going forward, we will continue to focus on accelerating digitization to drive customer acquisitions and transactions. Our business and operating model are being enhanced to deliver on revenue and product penetration targets across geographies and segments where we have identified opportunities.”
Speaking on the Q1 2021 numbers, Chief Financial Officer, Joe Mbulu said, “We have continued to deliver improved efficiency, enabling growth in PBT, which grew by 12per cent to N6.9billion.
“We are continuing to partly mitigate the impact of a lower interest margin and high inflation environment by maintaining a focus on cost which drove a reduction in operating expenses by 3.4per cent from N18billion to N17.3billion and an enhanced cost-income ratio of 71.4per cent, from 74.3per cent in Q1 2020.
“The 10per cent growth in non-interest income recorded during the quarter was supported by strong growth in recoveries as well as an improvement in net income from other financial instruments which rose by 109per cent to N3illion from N1.4billion.
“Our capital position remains strong, with a capital adequacy ratio (CAR) of 17.3per cent, while our non-performing loan ratio remains good at four per cent These are critical enablers to deliver our 2021 strategic priorities.”
